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Pricing Opportunity Opens Up for Late-Model Combines
Call them the bellwether combines. These are the late-model and low-hour machines that establish the top price paid for machines sold at auction. Their values have a direct effect upon asking prices at dealers’ lots, as well.
I set out to track the price trend on bellwether combines, restricting my investigation to harvesters with less than 500 separator hours that have sold at auction in recent months. Find the results of my research in this Pocket Price Guide.
Before starting this quest, I figured my search would only uncover a handful of combines. That’s because, typically, late-model and low-hour combines are predominantly found on dealers’ lots. They were gold several years ago, often selling before such combines came in on a trade-in.
That changed dramatically in 2014, when used combine inventories started to swell. Dealers’ lots filled to capacity in 2015. In 2016, a growing number of businesses sought to reduce their inventories by sending some of these cherry harvesters to auction. This explains why, within one hour of beginning my price investigation, I had uncovered nearly 100 low-hour harvesters that sold recently.
late-summer sell-off in the works
This alerted me to the possibility that the industry was still sitting on a large inventory of used combines. So I visited John Deere’s machinefinder.com, an online dealer listing of machinery available for sale. A quick search revealed 6,461 combines of all ages listed.
Confirming my point that dealers prefer to hold onto late-model combines to stock their used lots, I found that 3,516 of the combines listed were S series machines built since 2012. Many of these were refurbished and were being sold with extended warranties under Deere’s Certified Pre-Owned equipment program.
This offers additional proof that the industry is still coping with large inventories of used harvesters. Of course, this is good news for buyers looking to expand harvest capacity or to upgrade combines.
Lack of new combine sales (the industry only built 5,381 combines in 2015!) and large numbers of used machines should inspire dealers to lower asking prices in an effort to cut used inventories. That effort will include more dealers sending harvesters to auction yet this month.